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State of the property market in South West

04 June 2009

Despite being in the property market for over 27 years, I’m finding this year's trading very surprising.  At the beginning of the year this office had a healthy stock of properties and I was wondering where the buyers would come from.  Five months into the year, I have a healthy register of buyers and I am now wondering where the properties will come from! 

General activity levels have dramatically improved since the beginning of this year and since January our applicant (buyer) register has doubled in size. Viewings, offers, sales agreed have significantly improved.  Year on year for the first five months trading - turnover is up by over 30%.  Improved sales activity is down in part to properties looking now very affordable - values are down year on year by about 20%, low interest rates, poor confidence in stock market and perception that the market has bottomed out. 

Realistic pricing is still the key to selling, i.e. Spring/Summer 2009 prices and not 2008 prices.

What properties are selling? Period cottages, converted barns, any properties with sea views, properties with land, projects and building plots. 

What's not selling?  Flats (unless with sea views), properties on main roads or blighted in some way i.e. near pylons, modern estate properties (unless well priced).  The drop in popularity in flats is explained in part due to the decline in the buy-to-let market and lack of first time buyers (who traditionally do not have large deposits).  Furthermore, buyers who perhaps a few years ago could only afford a flat can now buy a house with a garden, which would be most people’s preference.

What's in very short supply? Large country houses between £1 million - £2 million.  Lots of waiting buyers. 

There has been a distinct resurgence of buyers who have been in rented accommodation and now wish to buy, buyers with cash funds in banks gaining no interest and second home buyers - this is a very important development as these buyers do not need but want to buy.  

Future prospects?  Considering where we’ve come from, it seems hard to believe that the market now may be held back by the lack of available properties, but the drop in supply will certainly underpin prices and at the very least slow the rate of decline in values.  It would be a very brave man indeed who would say that values will be going up - at best values will stabilise. 

To summarise, in 2008 the market fell off a cliff with an historic 20% drop in values.  Shock and awe.  The good news is that most likely, in our area the worst is over and we are looking at a period of stability.  House selling is now no longer down to luck but careful planning, well considered pricing and professional marketing.